TOKYO: Japan’s exports fell for a fourth straight month in March as China-bound shipments slumped again, reinforcing growing anxiety that weak external demand is likely to have knocked first quarter economic growth. Ministry of Finance data out on Wednesday showed exports fell 2.4 percent in March from a year earlier, compared with a 2.7 percent drop predicted by economists in a Reuters poll, and followed a 1.2 percent decline in February. The data reinforces worries that weak external demand may hurt company profits and in turn curb business expenditures, workers’ wages and consumer spending in a broad hit to growth. Some analysts expect Japan’s economy likely swung back to a mild contraction in the first quarter as declines in exports and capital expenditure dented private consumption. That would pile pressure on Prime Minister Shinzo Abe to once again delay a planned sales tax hike in October needed to fix the world’s heaviest public debt burden at twice the size of its economy. The economy grew at an annualized rate of 1.9 percent in the fourth quarter driven by business and consumer spending. Bank of Japan Governor Haruhiko Kuroda last week stuck to his optimism that Japan’s export-dependent economy will soon climb out of its doldrums as global growth recovers. Kuroda, however, did warn of lingering risks to the global outlook, including the outcome of US-China trade talks and Britain’s potentially messy departure from the European Union. Markets expect the BOJ to stand pat at a rate review next week, though some investors say the recent batch of soft indicators may pile pressure on policymakers to add to the central bank’s already massive stimulus later in the year. Wednesday’s data came on the heels of this week’s bilateral trade talks between Tokyo and Washington. US President Donald Trump has prodded Japanese automakers to boost more jobs in the United States as the White House has threatened to impose tariffs of up to 25 percent on imported vehicles, on the grounds of national security. Imports of Japanese cars make up about two-thirds of Japan’s $69 billion annual trade surplus with the United States. US-bound exports rose 4.4 percent in the year to March, driven by car shipments, which grew 5.1 percent. Imports from the United States declined 0.2 percent, resulting in Japan’s trade surplus with the country rising 9.8 percent year-on-year to 683.6 billion yen. Exports to China, Japan’s biggest trading partner, fell 9.4 percent year-on-year in March, reversing from a 5.6 percent gain in February. Asia-bound shipments, which account for more than half of overall exports, fell 5.5 percent, down for a fifth straight month. Japan’s overall imports rose 1.1 percent in the year to March, undershooting the median estimate for a 2.6 percent annual increase, resulting in a trade surplus of 528.5 billion yen.
Japan exports slump on weak China demand, heaping pressure on economy
Japan exports slump on weak China demand, heaping pressure on economy
- Ministry of Finance data out on Wednesday showed exports fell 2.4 percent in March from a year earlier
- Exports to China, Japan’s biggest trading partner, fell 9.4 percent year-on-year in March
G7 countries to release oil reserves as IEA agrees to largest ever market intervention
- IEA recommends release of 400 million barrels
RIYADH: Germany, Japan and Austria will release part of their oil reserves after the International Energy Agency recommended the release of 400 million barrels of oil from stockpiles, the largest such move in IEA history.
In a statement, IEA Executive Director Fatih Birol said the flow of oil, gas and other commodities through the Strait of Hormuz have all but stopped, leading global energy supply to fall by around 20 percent.
Ahead of the confirmation of the move — a larger intervention than the 182.7 million barrels that were released in 2022 by in response to Russia’s invasion of Ukraine — several countries began setting out plans to bring their reserves into play as countries grapple with soaring crude prices amid the US-Israeli war with Iran.
Birol said: “I can now announce that IEA countries have decided to launch the largest ever release of emergency oil stocks in our agency's history.
“IEA countries will be making 400 million barrels of oil available to the market to offset the supply lost through the effective closure of the strait.
“This is a major action aiming to alleviate the immediate impacts of the disruption in markets.”
Germany’s Economy Minister Katherina Reiche confirmed on Wednesday her government plans to limit petrol price increases at filling stations to once a day and to introduce more stringent antitrust regulation of the sector.
She did not give an exact timing for those measures, but added that the US and Japan would be the largest contributors to the release of the oil reserves.
The US has not confirmed it would do so, but its Interior Secretary Doug Burgum told Fox News on Wednesday that “these are the kinds of moments that these reserves are used for.”
The announcements did not stop oil prices rising, with Brent crude up 3.26 percent to $90.66 a barrel at 4:29 p.m Saudi time, and West Texas Intermediate up 3.12 percent to $86.05. Both were some way below the $119 a barrel seen earlier in the week.
“The situation regarding oil supplies is tense, as the Strait of Hormuz is currently virtually impassable,” Germany’s Reiche said.
“We will comply with this request and contribute our share, because Germany stands behind the IEA’s most important principle: mutual solidarity,” Reiche said about the IEA’s request.
According to a statement by Reiche’s ministry, Germany will contribute 2.64 million tonnes of oil. This corresponds to 19.51 million barrels.
Reiche stressed there was no supply shortage in the country, which has a legally mandated reserve of oil and oil products intended to cover 90 days’ demand.
South Korea will release 22.46 million barrels of oil, which represents 5.6 percent of the total IEA ask, the country's industry ministry said.
“The government will consult with the IEA secretariat on details, such as the timing and amount, from the perspective of national interests in accordance with domestic conditions,” the ministry said in a statement.
The ministry said it would continue to coordinate closely with major countries in responding to high oil prices to minimise any domestic impact.
Austrian Economy Minister Wolfgang Hattmannsdorfer said his country was releasing part of the emergency oil reserve and extending the national strategic gas reserve, adding: “One thing is clear: in a crisis, there must be no crisis winners at the expense of commuters and businesses.”
Acting ahead of the IEA move, G7 member Japan announced plans to release 15 days' worth of private-sector oil reserves and one month's worth of state oil reserves.
“Rather than wait for formal IEA approval of a coordinated international reserve release, Japan will act first to ease global energy market supply and demand, releasing reserves as early as the 16th of this month,” Prime Minister Sanae Takaichi said in a broadcast statement.
Following a meeting with the IEA on Wednesday, G7 energy ministers said: “In principle, we support the implementation of proactive measures to address the situation, including the use of strategic reserves.”
All IEA member countries are required to keep 90 days’ worth of their nation’s oil use in reserve in case of global disruption.
